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EXHIBIT 10.69
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of June 16, 1998,
by and between Spanish Broadcasting System of Puerto Rico, Inc., a Puerto Rico
corporation ("Buyer"), and Pan Caribbean Broadcasting Corporation, a Connecticut
corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is the licensee of Radio Station WMDD(AM) and Radio
Station WDOY(FM), licensed to Fajardo, Puerto Rico, and related licenses and
authorizations issued by the Federal Communications Commission ("FCC"); and
WHEREAS, Seller desires to sell certain properties and assets
pertaining to WDOY(FM) only (the "Station"), and Buyer desires to purchase the
same, all subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer hereby agree as follows:
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Section 1. Purchase and Sale of Properties and Assets.
(a) Station's Assets. Subject to and in reliance upon the
representations, warranties and agreements herein set forth, and subject to the
terms and conditions herein contained, on the Closing Date (as defined in
Section 4), Seller agrees to convey, sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase certain of the assets of the Station,
including, but not limited to, the following assets (collectively, the
"Station's Assets"):
(i) Licenses and Authorizations. The licenses, permits and
authorizations issued by the FCC listed on Schedule 1(a)(i) hereto
(collectively, the "Licenses"), and all the rights of Seller in and to the call
letters "WDOY(FM)".
(ii) Records, Etc. Except as excluded in Section 1(b), all
files, logs and books (or true copies thereof) relating to the operation of the
Station, including all records, reports, logs and documents required by the FCC
to be maintained and the complete local public file (collectively, the
"Records"); provided, however, that Seller shall be entitled to keep the
originals of records for periods prior to January 1, 1997 (the "Seller-Retained
Records"), it being understood that as to the Records (1) Seller shall have the
right on reasonable request and at its expense to make copies thereof; (2) Buyer
shall have the right on reasonable request and at its expense to make copies of
the Seller-Retained Records; and (3) Buyer shall preserve and
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protect the originals of all records (except Seller-Retained Records) for a
period of six (6) years from and after the Closing Date.
(iii) Personal Property. The tangible personal property of
Seller located at the El Yunque transmission site and listed on Schedule
(1)(a)(iii) hereto.
(iv) Goodwill. All of Seller's goodwill in, and going concern
value of, the Station.
(v) Agreements, Etc. To the extent Seller, using its best
efforts, is able to secure consents to assignment, the agreements, leases and
contracts listed on Schedule 1(a)(v) hereto, including any renewals, extensions,
amendments or modifications thereof, and any additional agreements, leases and
contracts made or entered into by Seller in the ordinary course of business
including, but not limited to, all unperformed agreements for the sale of
advertising on the Station.
(b) Excluded Assets. It is understood that no: (i) real property; (ii)
cash; (iii) inter-company receivables; (iv) notes receivable; (v) bank deposits;
(vi) other cash equivalents and/or investment securities; (vii) accounts
receivable; (viii) contracts that have expired prior to the Closing Date in the
ordinary course of business; (ix) the articles of incorporation, by-laws, minute
books, stock transfer records and all other corporate, tax and accounting
records relating to the corporate affairs of Seller; (x) sales, income and other
tax refunds and
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claims therefore relating to the period prior to the Closing; (xi) insurance
polices; (xii) claims against third parties, based on activities occurring prior
to Closing, not specifically conveyed and not specifically related to the
Station's Assets; (xiii) any and all insurance proceeds or claims made by Seller
relating to property or equipment repaired, replaced or restored by Seller prior
to the Closing Date; (xiv) all pension, profit-sharing or cash or deferred
compensation plans and trusts and the assets thereof and any other employee
benefit plan or arrangement and the assets thereof, if any; (xv) all choses in
action of Seller relating to the Station, which exist on or prior to the Closing
Date and which related entirely to the period before the Closing Date; (xvi)
assets of Seller used or useful in the operation of Station WMDD(AM); (xvii) all
deposits with utilities, governmental agencies, landlords and the like; (xviii)
broadcast auxiliary licenses issued for use by Station WMDD alone or with the
Station (under its former call letters, WMDD-FM); (xix) the lease for office
space occupied by Seller in San ▇▇▇▇; and (xx) all other assets not specifically
included as the Station's Assets (all of which are referred to as "Excluded
Assets") shall be included in the assets being purchased by Buyer.
(c) Liens. Seller agrees that the Station's Assets to be conveyed on
the Closing Date pursuant to this Agreement will
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be conveyed free and clear of all liens, charges, claims and encumbrances of any
kind.
(d) Liabilities. Buyer shall assume and undertake to pay, discharge and
perform the obligations and liabilities of Seller relating to the Station and
the Station's Assets which are referenced in this Agreement for the period
beginning, or arising out of events occurring on or after, 12:01 A.M. on the
Closing Date. Except as otherwise expressly provided in this Agreement, Buyer
will not assume, incur or be charged with, in connection with the transactions
herein contemplated, any liabilities or obligations of any nature whatsoever,
contingent or otherwise, of the Seller or the Station arising (i) prior to the
Closing, or (ii) in connection with the operation of the Station or the
Station's Assets or any claims asserted against the Station or the Station's
Assets relating to any event (whether act or omission) prior to the Closing.
Except as specified in this Agreement, Seller retains all obligations and
liabilities not expressly assumed by Buyer hereunder without any liability to
Buyer.
(e) Trade Agreements. Schedule 1(e) includes, but is not limited to, a
description of agreements for the sale of time on the Station for merchandise or
services ("Trade Agreements") on the date hereof and correctly sets forth
Seller's current obligations under each such Trade Agreement. On the Closing
Date, Buyer shall assume the Trade Agreements listed on this
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Schedule; provided, however, that if Seller's aggregate obligations under Trade
Agreements as of the Closing Date exceed $20,000.00, then all amounts in excess
of $20,000.00 shall be considered an operating expense of Seller to be pro-rated
in accordance with Section 3. The Trade Agreements shall be considered assumed
by Buyer. Seller shall use reasonable efforts to eliminate any negative balance
in excess of $20,000.00 for Trade Agreements prior to the Closing Date.
Section 2. Purchase Price and Method of Payment.
(a) Purchase Price and Method of Payment. The purchase price for the
assets acquired hereunder shall be Eight Million Two Hundred Fifty Thousand
Dollars ($8,250,000) ("Purchase Price"), which shall be paid to Seller at
Closing in same day funds by wire transfer to an account specified by Seller at
least two business days prior to Closing.
(b) Pre-Payment. Buyer has deposited the sum of Four Hundred Twelve
Thousand Five Hundred Dollars ($412,500) with Seller to be credited against the
Purchase Price at Closing by Seller (the "Pre-Paid Deposit").
(c) Allocation of Purchase Price. Buyer and Seller agree that the
Purchase Price shall be allocated to the Assets by Buyer, which allocation shall
be reasonably acceptable to Seller. Buyer and Seller each shall file IRS Form
8594 with their respective federal income tax return for the tax year in which
the Closing occurs, containing the information agreed upon by the
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parties pursuant to the immediately preceding sentence. Buyer and Seller each
shall deliver to the other a copy of the IRS Form 8594 as filed with their
respective federal income tax return within 30 days of the filing of such
return.
Section 3. Adjustments and Assumptions; Accounts Receivable. The
expenses and income attributable to the operation of the Station up to 12:01
a.m. on the Closing Date (the "adjustment time") shall be for the account of
Seller and thereafter shall be for the account of Buyer. Any and all expenses
and income (excepting categories of income not included within the Station's
Assets) including, but not limited to, power and utility charges, lease rents,
taxes (excluding taxes arising by reason of the transfer of the Station's
Assets, which shall be paid as specified in Section 15 hereof), Fajardo
municipal license fees and FCC regulatory fees, and similar prepaid and deferred
items shall be prorated between Seller and Buyer as of the adjustment time.
In furtherance hereof:
(a) Preliminary Adjustment. Ten (10) days prior to the Closing Date,
Seller shall prepare and deliver to Buyer, a balance sheet (the "Preliminary
Closing Balance Sheet"), setting forth the adjustment to the Purchase Price
determined in accordance with this Section 3. The Preliminary Closing Balance
Sheet shall be prepared in a form which sets forth the amounts due to or from
Buyer or Seller, as the case may be. Upon receipt
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of the Preliminary Closing Balance Sheet, Buyer and its accounts shall have the
right to examine, at Buyer's expense, the Preliminary Closing Balance Sheet and
all work papers, schedules, and other books and records used in the preparation
of such Preliminary Closing Balance Sheet, and to make reasonable inquiry of
Seller and its accountants. If Buyer objects to the Preliminary Closing Balance
Sheet, Seller and Buyer shall each use their best efforts to resolve their
differences concerning the Preliminary Closing Balance Sheet as soon as possible
but, in any event, prior to the Closing Date. If Seller and Buyer are unable to
resolve the matter, and the amount in dispute is $20,000 or less, the parties
shall proceed to Closing, making prorations then only with respect to undisputed
items with the disputed items to be resolved as postclosing adjustments pursuant
to Section 3(b). If the amount in dispute is more than $20,000, the disputed
shall be submitted to a mutually-acceptable accountant (the "Accountant") for
resolution as soon as practical but in any event within fifteen (15) days, and
the Closing shall be postponed (and all deadlines set forth herein extended) for
the number of days taken by the Accountant to deliver its decision plus three
(3) days. The parties shall use their respective best efforts to cause the
Accountant to reach a decision at the earliest possible date. The decision of
the Accountant shall be final and binding upon the parties. The fees of the
Accountant shall be paid by the parties in inverse
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proportion to the award of the disputed amount to the parties (i.e., if Party A
contends it is due $6,000, Party B contends Party A is due $4,000, and the
Accountant determines that $5,200 is due Party A, then Party A shall pay 40% of
the fees and Party B shall pay 60% of the fees).
(b) Final Adjustment. Within sixty (60) days following the Closing
Date, Buyer shall prepare and deliver to Seller a statement (the "Final Closing
Balance Sheet") indicating the prorations as set forth above. Within ten (10)
days of receipt of the Final Closing Balance Sheet, Seller shall either accept
the prorations set forth in the Final Closing Balance Sheet or give Buyer a
notice disputing such prorations ("Notice of Disagreement"). If Seller fails
either to accept the prorations set forth in the Final Closing Balance Sheet or
to give Buyer a Notice of Disagreement within ten (10) days of receipt of the
Final Closing Balance Sheet, then Seller shall be deemed to have accepted such
prorations. The Notice of Disagreement shall state the amount that Seller
believes is due to Seller ("Seller's Amount"), and Buyer shall have ten (10)
days to accept or reject Seller's Amount. If Buyer rejects Seller's Amount, the
dispute shall be submitted to Accountant for resolution as provided above in
Section 3(a), which resolution shall be final and binding on the parties. The
fees of the Accountant shall be paid as provided in Section 3(a). All amounts
owed pursuant to this Section 3 shall be paid within ten (10) days of resolution
of the
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amount due. If such amount is not paid within such ten (10) day period, interest
on such amount shall accrue until paid at the prime rate as published from time
to time in the Wall Street Journal plus five percent (5%).
(c) Accounts Receivable. All accounts receivable arising out of the
conduct of the business and operations of the Station prior to the Closing Date
("Seller's Accounts Receivable") shall be identified and valued as of the day
immediately prior to that date. Seller hereby assigns to Buyer Seller's Accounts
Receivable, effective upon the Closing Date, solely for the collection hereof.
For a period of 120 days after the Closing Date, Buyer shall use reasonable
efforts to collect Seller's Accounts Receivable in the normal and ordinary
course of business. Buyer's authority shall not extend to the compromise of any
Seller's Accounts Receivable or the institution of litigation, employment of
counsel or a collection agency or any other extraordinary means of collection
unless authorized by Seller in writing. Buyer shall apply all such amounts
collected on Seller's Accounts Receivable to the debtor's oldest account
receivable first (except that any such accounts collected by Buyer from persons
who are also indebted to Buyer for the purchase of advertising time on the
Station may be applied to Buyer's account where there is a pre-existing bona
fide dispute between Seller and such account debtor with respect to such
account), and Buyer shall provide to Seller an aging report and a
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collections report and shall pay Seller the full amount collected on Seller's
Accounts Receivable, net of commissions, within fifteen (15) days after the end
of each calendar month during the above-mentioned 120 day period. Any of
Seller's Accounts Receivable remaining uncollected at the earlier of the
termination date of this Agreement or the end of such 120 day period shall be
re-assigned to Seller for collection. All accounts receivable arising out of the
conduct of the business and operation of the Station on and after the Closing
Date shall be and remain the property of Buyer.
Section 4. The Closing.
(a) FCC Consent. Consummation of the transactions contemplated
hereunder is conditioned upon the FCC having given its consent in writing to the
assignment to Buyer of the FCC licenses and other authorizations set forth in
subparagraph 1(a)(i) hereof, and such consent having become "final", i.e., no
longer subject to timely review by the FCC or by any court or, in the event of
reconsideration upon its own motion or otherwise by the FCC or an appeal by any
person to any court, upon the decision of such body becoming no longer subject
to review (unless the Buyer agrees to close without such consent having become
"final"). The Closing shall take place on a date not later than March 31, 1999
("Outside Closing Date").
(b) FCC Application. The parties agree to proceed, as expeditiously as
practicable, to file or cause to be filed an
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application requesting FCC consent to the transactions here involved. The
parties agree that said application shall be duly filed with the FCC not later
than five (5) business days after the date of execution of this Agreement, and
that such application shall be prosecuted by all parties in good faith and with
due diligence. The parties hereto shall each bear their own legal fees and any
and all costs and expenses not specified herein with respect to the sale and
purchase of the Station's Assets including, without limitation, the preparation
of the applicable sections of the FCC application. However, all FCC filing fees
shall be paid one-half each by Seller and Buyer.
(c) Closing. The date of Closing and the time thereof (herein referred
to as the "Closing Date"), shall be as mutually agreed to by the parties;
provided, that absent such agreement the Closing shall take place at 10:00 a.m.
on the fifth business day after the FCC consent shall have become a "final
order." Closing shall take place at the offices of Buyer's counsel in
Washington, D.C., or at such other place as may be mutually agreed to by the
parties to this Agreement.
Section 5. Seller's Representations and Warranties.
Seller represents, warrants and agrees now and as of the Closing as
follows:
(a) Organization. Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State of Connecticut and in
good standing in the
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Commonwealth of Puerto Rico, the only jurisdiction in which it conducts the
business of operating the Station. Seller has the full power and authority to
own the Station's Assets and to carry on the business of the Station as now
being conducted.
(b) Authorization of Agreement; No Breach.
(1) All corporate action necessary to be taken by or on the
part of Seller in connection with the transactions contemplated hereby has been
duly and validly taken, and the execution, delivery and performance of this
Agreement have been duly and validly authorized. Seller has the full power and
authority to execute, deliver and perform this Agreement and to consummate all
the transactions hereby contemplated. Neither such execution, delivery and
performance nor compliance by Seller with the terms and provisions hereof will
(i) conflict with or result in a breach of any of the terms, conditions or
provisions of the Articles of Incorporation and By-Laws of Seller, (ii)
(assuming receipt of all necessary approvals from the FCC) constitute a
violation of, conflict with or result in any breach of or default under, result
in any termination or modification of, or cause any acceleration of any
obligation of the Station, to which Seller is a party or by which it is bound,
or by which the Station or any of the Station's Assets may be affected, or any
judgment, order, injunction, decree, law, regulation, rule or ruling of any
court or other governmental authority to which Seller, the Station or the
Station' Assets is subject, or (iii)
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result in the creation or imposition of any lien, charge or encumbrance against
the Station or the Station's Assets which is not released on or prior to
Closing. Except for the consent of the FCC and the U.S. Forest Service, and
except for the consent of certain third parties as may be required in contracts
to be assigned to Buyer hereunder (including, but not limited to, the consent of
the Puerto Rico Telephone Company), which consents Seller shall use reasonable,
good faith efforts to obtain but which shall not be a condition precedent to
Closing, no other consent, approval or authorization of, or filing with, any
person, entity or agency of any kind not yet obtained is required. This
Agreement constitutes the valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
(2) Seller is not in violation or breach of any of the terms,
conditions or provisions of its Articles of Incorporation or By-Laws, or any
court order, judgment, arbitration award, or decree relating to or affecting the
Station or the Station's Assets to which Seller is a party or by which it is
bound and has received no notices of same.
(c) Licenses and Authorizations. Seller is, and on the Closing Date
will be, the holder of the Licenses relating to the Station, all of which are in
full force and effect (and none of which shall be altered or modified between
the date hereof and the Closing Date). Except as listed and described on
Schedule
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1(a)(i), there is not pending, or to the knowledge of Seller threatened, any
action by or before the FCC to revoke, suspend, cancel, rescind or modify any of
the FCC Licenses.
(d) Personal Property. Schedule 1(a)(iii) hereto contains a complete
and accurate list, as of the date hereof, of the tangible personal property at
El Yunque used in the operation of the Station. At the Closing, all of such
property shall be owned by, and transferred to, Buyer free and clear of all
liens, charges, claims and encumbrances of any kind.
(e) No Litigation. There is no suit, action or other proceeding pending
or, so far as is known to Seller, threatened against Seller or the Station which
would, if determined against Seller or the Station, have a material adverse
effect on the Station or the Station's Assets. There are no judgments, orders,
decrees or injunctions against the Seller or the Station which adversely affect
the Station.
(f) Taxes. All federal, state and local tax returns required to be
filed by Seller by the Closing Date (the "Tax Returns"), have or will have been
filed with the appropriate governmental agencies in all jurisdictions in which
Tax Returns are required to be filed, and all Tax Returns properly reflect the
taxes of Seller for the periods covered thereby.
(g) Brokerage. Seller agrees to indemnify and hold harmless Buyer
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage, commission or
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finder's fee alleged to be payable because of any act, omission or statement of
the Seller.
(h) Compliance With Laws. Seller has materially complied with, and is
not knowingly in violation of any federal or local laws, regulations, or orders
affecting the Station's Assets, or the operation of the Station. Without
limiting the generality of the foregoing:
(i) The Station's transmitting and studio equipment is
operating in material compliance with the terms and conditions of the Station's
Licenses, including without limitation all regulations concerning equipment
authorizations and human exposure to radio frequency radiation.
(ii) Seller has complied, in all material respects, with all
applicable laws, rules and regulations relating to the employment of labor,
including those concerning wages, hours, equal employment opportunity,
collective bargaining, pension and welfare benefit plans, and the payment of
Social Security and similar taxes, and Seller is not liable for any arrearages
of wages, tax withholding obligations, or any tax penalties due to any failure
to comply with any of the foregoing.
(i) Insurance. Seller maintains insurance policies providing
general coverage against risks commonly insured against. To Seller's knowledge,
all of such policies are in full force and effect and Seller is not in default
of any material provision thereof. Seller has not received notice from any
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issuer of any such policies of its intention to cancel, terminate or refuse to
renew any policy issued by it. Seller will continue to maintain such insurance
coverage in full force and effect through the Closing Date.
Section 6. Buyer's Representations and Warranties. Buyer represents,
warrants and agrees now and as of the date of Closing as follows:
(a) Organization. Buyer is a corporation organized, validly existing
and in good standing in the State of Delaware.
(b) Authorization of Agreement; No Breach. The execution, delivery and
performance of this Agreement have been duly and validly authorized by Buyer,
and Buyer has the full corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions hereby contemplated.
Neither such execution, delivery and performance nor compliance by Buyer with
the terms and provisions hereof will (assuming receipt of all necessary
approvals from the FCC) conflict with or result in a breach of any of the terms,
conditions or provisions of the Certificate of Incorporation or By-Laws of Buyer
or any judgment, order, or decree of any court or other governmental authority
to which Buyer is subject, or any material agreement to which the Buyer is
subject.
(c) Qualification. Buyer has no knowledge of any facts which would,
under present law (including the Communications Act) and present rules,
regulations and practices
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of the FCC, disqualify Buyer as an assignee of the Licenses, or as an owner
and/or operator of the Station's Assets, and Buyer will not take, or
unreasonably fail to take, any action which Buyer knows or has reason to know
would cause such disqualification.
(d) Litigation. There is no litigation or proceeding pending or, so far
as is known to Buyer, threatened against Buyer that would affect Buyer's ability
to carry out this Agreement.
(e) Brokerage. Buyer agrees to indemnify and hold harmless Seller
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage, commission or finder's fee alleged to be payable because of
any act, omission or statement of the Buyer.
(f) Financial Qualification. Buyer is, and as of the Closing Date will
be, financially qualified to enter into and undertake the performance of the
obligations set forth in this Agreement.
Section 7. Performance by Buyer. The obligations of Buyer hereunder are
subject to the following conditions, which conditions shall be waivable by Buyer
in its sole discretion:
(a) Representations and Warranties. The representations and warranties
of Seller contained in this Agreement shall be true and correct at the time of
Closing hereunder as though made at and as of such time, and each and all of the
agreements of the Seller to be performed on or prior to
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the Closing hereunder pursuant to the terms of this Agreement shall have been
duly performed, and Seller shall have delivered to Buyer certificates, dated as
of the Closing Date, to such effect reasonably acceptable in form and substance
to Buyer.
(b) Litigation, Etc. No litigation, action, suit, investigation or
proceeding of any kind shall have been instituted or threatened before any court
or governmental body, which might reasonably have a material adverse effect upon
the Station's Assets.
(c) FCC Licenses. At the Closing, the Licenses shall be assigned and
transferred to Buyer, shall be valid for the full license term then currently
issued to the Station, and shall contain no material adverse modifications of
the terms of any such License from the terms in effect as of the date of this
Agreement.
(d) Legal Opinion. Buyer shall have received the respective written
opinions of corporate and communications counsel for Seller, dated the Closing
Date, in form and content reasonably acceptable to counsel for Buyer and
collectively to the effect that:
(i) Seller is organized and validly existing and in good
standing under the laws of the State of Connecticut and qualified to do business
in the Commonwealth of Puerto Rico.
(ii) The Agreement has been duly authorized, executed and
delivered by Seller and is the valid and binding
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obligation of Seller, enforceable against Seller in accordance with its terms
(subject to any applicable bankruptcy, reorganization, insolvency or other laws,
now or hereafter in effect, affecting creditors' rights generally as well as all
rights in equity).
(iii) Neither the execution, delivery and performance of this
Agreement nor any instrument of sale required hereunder nor compliance by Seller
with the terms and provisions of this Agreement will conflict with or result in
a breach of any of the terms, conditions or provisions of the Articles of
Incorporation of Seller or any judgment, order or decree known to such counsel,
or any agreement known to such counsel other than an agreement listed in
Schedule 1(a)(v). Such opinion, at the option of such counsel rendering the
opinion, may be in the form and be governed by and interpreted in accordance
with the Legal Opinion Accord of the ABA Section of Business Law (1991).
(e) Performance. Seller shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing hereunder.
Section 8. Seller's Performance. The obligations of Seller hereunder
are subject to the following conditions, which conditions shall be waivable by
Seller in its sole discretion:
(a) Payments, Etc. All payments hereunder which are due and payable by
Buyer on or before the Closing Date shall have
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been paid in accordance with the terms of this Agreement, and Buyer shall have
executed all of the documents required of it herein.
(b) Representations and Warranties. Each of Buyer's representations and
warranties contained herein shall be true at the time of Closing, as though made
at and as of such time and Buyer shall have delivered to Seller certificates to
that effect, dated as of the Closing Date, reasonably acceptable in form and
substance to Seller.
(c) Performance. Buyer shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing hereunder.
(d) Litigation. No litigation, investigation or proceeding of any kind
shall have been instituted or threatened which would adversely affect the
ability of Buyer to comply in all material respects with the provisions of this
Agreement.
(e) Legal Opinion. Seller shall have received an opinion of counsel for
Buyer, dated the Closing Date, in form and content reasonably acceptable to
Seller's counsel to the effect that:
(i) Buyer is organized and validly existing and in good
standing under the laws of each state in which it conducts business.
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(ii) The Agreement has been duly authorized, executed and
delivered by the Buyer, and duly ratified by Buyer's Board of Directors, and is
the valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms (subject to any applicable bankruptcy, reorganization,
insolvency or other laws, now or hereafter in effect, affecting creditors,
rights generally as well as all rights in equity).
(iii) Neither the execution, delivery and performance of this
Agreement nor compliance by Buyer with the terms of this Agreement will conflict
with or result in a breach of any of the terms, conditions or provisions of the
Certificate of Incorporation or By-Laws of Buyer or any judgment, order or
decree known to such counsel, or any material agreement known by such counsel to
which Buyer is subject. Such opinion, at the option of such counsel rendering
the opinion, may be in the form and be governed by and interpreted in accordance
with the Legal Opinion Accord of the ABA Section of Business Law (1991).
Section 9. Rights of Indemnification.
(a) Except as specifically assumed by Buyer hereunder, it is understood
and agreed that Buyer does not assume and shall not be obligated to pay, any
liabilities of the Seller under the terms of this Agreement, and it shall not be
obligated to perform any obligations of the Seller, of any kind or manner. All
representations, warranties and agreements by Seller shall survive the Closing
for a period of one (1) year from the date of
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Closing notwithstanding any investigation at any time by or on behalf of Buyer.
Seller hereby agrees to indemnify and hold Buyer and its successors and assigns
(collectively, "Indemnified Parties" and individually, an "Indemnified Party")
harmless for a period of one (1) year from the date of Closing from and against
any and all damage, liability, deficiency or expense (including, without
limitation, reasonable attorney's fees) arising out of or resulting from any
material misrepresentation or breach of warranty on the part of Seller under
this Agreement. Seller hereby agrees to indemnify and hold Buyer and its
successors and assigns (collectively, "Indemnified Parties", and individually,
an "Indemnified Party") for a period of one (1) year from the date of Closing,
harmless from and against:
(i) Any and all claims, liabilities and obligations, damages,
liability, deficiency or expense not expressly assumed by Buyer pursuant to this
Agreement, arising from or related to the Seller's ownership or operation of the
Station or the Station's Assets prior to the Closing hereunder, including
without limitation, any claims arising in connection with any failure by Seller
to pay or discharge any liability relating to the Station that is not expressly
assumed by Buyer pursuant to the provisions of this Agreement;
(ii) Any and all damage, liability, deficiency or expense
(including, without limitation, reasonable attorneys' fees arising out of all
third party disputes), excepting such
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matters as may arise under the lease contemplated in Section 12 (the "Lease").
(iii) Any and all fees, costs and expenses of any kind,
related or incident to any of the foregoing (including, without limitation,
reasonable legal fees and expenses).
(iv) Any and all severance pay or other payment required to be
paid with respect to any employee of the Station prior to Closing terminated by
Seller or arising by reason of the sale of the Station or any liability or
obligation arising under any assumed employment contract relating to the payment
of compensation, bonuses or benefits accrued prior to the Closing Date or as
respects the deferred compensation or phantom equity arising by reason of the
sale of Station or otherwise.
(v) Notwithstanding the foregoing, Seller shall have no
obligation to indemnify Buyer unless and until the aggregate amount of damages
exceeds Ten Thousand Dollars ($10,000) (the "Basket"), at which time
indemnification for the full amount of all damages (including the first $10,000)
shall be due; provided, however, that payments due or made in connection with
the prorations specified in Section 3 shall not be applied to the Basket.
(b) If any claim or liability shall be asserted against any Indemnified
Party which would give rise to a claim by such Indemnified Party against Seller
for indemnification under the provisions of this Section, such Indemnified Party
shall
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promptly notify the Seller in writing of the same and give all reasonable
cooperation in the defense thereof and the Seller shall be entitled at its own
expense to compromise or defend any such claim provided. Failure to give prompt
notification shall not limit the Seller's obligation except to the extent it is
actually prejudiced by the delay in notice.
(c) Except for obligations arising under the Lease (for which there are
separate indemnification provisions), Buyer hereby agrees to indemnify and hold
the Seller and its successors and assigns (collectively, "Indemnified Parties",
and individually, an "Indemnified Party"), for a period of one year from the
date of Closing, harmless from and against:
(i) Any and all claims, liabilities and obligations arising
from or related to the ownership or operation of the Station subsequent to the
Closing hereunder; and
(ii) Any and all damage, liability, deficiency or expense
(including, without limitation, reasonable attorneys' fees) resulting from any
material misrepresentation or breach of warranty, or obligation of Buyer arising
under this Agreement.
(iii) Notwithstanding the foregoing, Buyer shall have no
obligation to indemnify Seller unless and until the aggregate amount of damages
exceeds the Basket, at which time indemnification for the full amount of all
damages (including the amount of the Basket) shall be due; provided, however,
that
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payments due or made in connection with the prorations specified in Section 3
shall not be applied to the Basket.
(d) If any claim or liability shall be asserted against the Seller
which would give rise to a claim by the Seller against Buyer for indemnification
under the provisions of this Section, Seller shall promptly notify Buyer of the
same and give all reasonable cooperation in the defense thereof and Buyer shall
be entitled at its own expense to compromise or defend any such claim.
(e) Anything in this Section 9 to the contrary notwithstanding, the
indemnifying party shall not, without the written consent of the Indemnified
Party, settle or compromise any third party claim or consent to the entry of
judgment (i) which does not include as an unconditional term thereof the giving
by the claimant or the plaintiff to the Indemnified Party of an unconditional
release from all liability in respect of the third party claim, or (ii) if there
is a reasonable probability that a claim may impose any non-monetary obligation
upon the Indemnified Party.
(f) Except for specific performance of Seller's obligation to
effectively and lawfully convey the Station's Assets to Buyer as provided in
this Agreement, the right to indemnification hereunder shall be the exclusive
post-Closing remedy of any party in connection with or arising out of this
Agreement including, without limitation, any breach by another
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party of its representations, warranties or covenants in this Agreement. SELLER
MAKES NO REPRESENTATIONS OR WARRANTIES EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND
HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Except for
specific performance of Seller's obligation to effectively and lawfully convey
the Station's Assets to Buyer as provided in this Agreement, and except as
provided in the Lease referenced in Section 12, each party hereby releases and
discharges the other party from any liability or claim with respect to
post-Closing remedies for which there is not an express indemnity under this
Agreement.
Section 10. Risk of Loss. The risk of any loss, damage or destruction
to any of the Station's Assets to be transferred hereunder from fire or other
casualty or cause shall be borne by the Seller at all times prior to the Closing
Date hereunder. Subject to the provisions hereof, Buyer shall have the option in
the event the loss or damage exceeds Fifty Thousand Dollars ($50,000.00) and the
property cannot be substantially repaired or restored before the Closing Date,
exercisable within ten (10) days after receipt of such notice from Seller to:
(i) Postpone the Closing until such time as the property has
been completely repaired, replaced or restored to Buyer's reasonable
satisfaction, unless the same cannot be
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reasonably effected within five (5) months of notification, at which time Buyer
may terminate this Agreement.
(ii) Elect to consummate the Closing and accept the property
in its "then" condition, in which event Seller shall assign all rights under any
insurance claims covering the loss and pay over (as part of the Station's
Assets) any proceeds under any such insurance policy theretofore received by
Seller with respect thereto. Upon the assignment of such insurance claims to
Buyer, Seller shall have no further obligation to Buyer for any loss of value to
the Station's Assets. In the event Buyer elects to postpone the Closing Date as
provided in Subparagraph (i) above, the parties hereto will cooperate and extend
the time during which this Agreement must be closed as specified in Section 4(a)
hereof.
Section 11. Seller's Performance at Closing. At the Closing hereunder,
the Seller will:
(a) FCC Licenses. Deliver to Buyer assignments of all Licenses to Buyer
in customary form and substance.
(b) Personal Property. Deliver to Buyer a ▇▇▇▇ of sale and all other
appropriate documents and instruments in customary form and substance assigning
good title to all personal property being sold to Buyer pursuant to this
Agreement, free and clear of any liens, charges, claims or encumbrances of any
kind.
(c) Assignment of Agreements. Except as qualified in Section 5(b)(1),
deliver to Buyer such assignments and further
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instruments of transfer as Buyer may reasonably require to effectuate the
assignment to it of those Station contracts, leases and agreements to be
assigned to it as set forth on Schedule 1(a)(v) to this Agreement, as updated
with Buyer's reasonable consent, not to be unreasonably withheld.
(d) Adjustments and Payment. If the adjustments and assumptions
provided for in Section 3 result in a net amount owing by the Seller to Buyer,
deliver a cashier's check or wire transfer to Buyer for such amount at the
Closing.
(e) Opinions. Deliver to Buyer the written opinions of Seller's
respective corporate and communications counsel, dated as of the Closing Date,
pursuant to the provisions of this Agreement.
(f) Officer's Certificate. Deliver to Buyer its certificate attesting
to the accuracy of all representations and warranties and due performance of all
obligations.
(g) Originals. Deliver to Buyer the originals, if available, of all
contracts, leases, agreements, commitments and trademark and copyright
registrations to be assigned to Buyer under this Agreement.
(h) Consents. Deliver to Buyer copies of any consents and approvals
Seller has been able to obtain including, but not limited to, estoppel
certificates and consents to assignment and collateral assignments to Buyer's
senior lender from all landlords.
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(i) Resolutions. Deliver to Buyer certified resolutions of Seller's
directors and stockholders authorizing Seller to enter into this Agreement.
(j) Other Documents. Deliver to Buyer such other documents as counsel
for Buyer may reasonably request for the purpose of consummating the
transactions described herein.
Section 12. Buyer's Performance at Closing. At the Closing:
(a) Payment. Buyer will deliver to Seller by confirmed wire transfer,
the monies payable at the Closing as set forth in the appropriate provisions of
Section 2 hereof.
(b) Adjustments and Payment. Buyer will, if the adjustments and
assumptions provided for in Section 3 hereof result in a net amount owing to the
Seller by Buyer, deliver a cashier's check or wire transfer to Seller for such
amount at the Closing.
(c) Opinion. Deliver the written opinion of its counsel, dated as of
the Closing Date, pursuant to the provisions of this Agreement.
(d) Officer's Certificate. Deliver to Seller its certificate attesting
to the accuracy of all of Buyer's representations and warranties and due
performance of all obligations.
(e) Assumptions. Buyer shall deliver to Seller such assumption
agreements and other documents in form and substance
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reasonably satisfactory to Seller as are required to make, confirm and evidence
Buyer's assumption of and obligation to pay, perform, or discharge Seller's
obligations under those contracts to be assumed by Buyer pursuant to this
Agreement.
(f) Resolutions. Buyer shall deliver certified resolutions of Buyer's
directors and stockholders authorizing Buyer to enter into this Agreement.
(g) Certificate. Buyer shall deliver a Certificate of Incorporation
regarding Delaware and a Certificate of Good Standing regarding the Commonwealth
of Puerto Rico, dated not more than five (5) business days prior to the Closing
Date.
(h) Lease. Buyer shall deliver the Lease attached hereto as Exhibit A
duly executed.
(i) Other Documents. Deliver to the Seller such other documents as
counsel for Seller may reasonably request for the purpose of consummating the
transactions described herein.
Section 13. Default and Remedies.
(a) Breach and Opportunity to Cure. If either party believes the other
to be in default hereunder, the nondefaulting party shall provide the defaulting
party with notice specifying in reasonable detail the nature of such default. If
such default has not been cured by the earlier of: (i) the Closing Date, or (ii)
within twenty (20) days after delivery of such notice (a "Default Notice"), then
the party giving such notice may (x) terminate this Agreement, (y) extend the
Closing Date under
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Section 4 (but no such extension shall constitute a waiver of such nondefaulting
party's right to terminate as a result of such default), and/or (z) exercise the
remedies available to such party pursuant to Section 13(b) or 13(c), subject to
the right of the other party to contest such action through appropriate
proceedings.
(b) Seller's Remedies. Buyer recognizes that if, as a result of Buyer's
default, the transactions contemplated hereby are not consummated, Seller would
be entitled to compensation, the extent of which is extremely difficult and
impractical to ascertain. The parties, therefore, agree that if this Agreement
is not consummated due to the material default of Buyer (any failure on Buyer's
part to consummate in accordance with its obligations under this Agreement being
deemed "material"), provided that Seller is not in material default, Seller
shall be entitled to retain the Pre-Paid Deposit (plus interest). The parties
agree that this sum shall constitute liquidated damages and shall be Seller's
sole and exclusive remedy and shall be in lieu of any and all other relief to
which Seller might otherwise be entitled due to Buyer's failure to consummate,
or default under, this Agreement.
(c) Buyer's Remedies. Seller agrees that the Station's Assets include
unique property that cannot be readily obtained on the open market and that
Buyer would be irreparably injured if this Agreement is not specifically
enforced after
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default. Therefore, Buyer shall have the right to specifically enforce Seller's
performance under this Agreement, and Seller agrees to waive the defense in any
such suit that Buyer has an adequate remedy at law and to interpose no
opposition, legal or otherwise, as to the propriety of specific performance as a
remedy. In the event Buyer elects to terminate this Agreement as a result of
Seller's material default instead of seeking specific performance (the remedies
being alternative, not cumulative), Buyer shall be entitled to return of the
Pre-Paid Deposit (plus interest) and any other legal remedies for damages which
may be available.
Section 14. Termination.
(a) Absence of Commission Consent or Court Approval. This Agreement may
be terminated at the option of either party upon notice to the other if the FCC
consent has not become a final order by March 31, 1999; provided, however, that
a party may not terminate this Agreement if (i) such party's action, inaction or
qualifications, has caused, or materially contributed to, a delay in any
decision or determination by the FCC, or (ii) the party seeking to terminate the
Agreement pursuant to this Section 14(a) is in material default hereunder. In
the event of termination pursuant to this Section, the Pre-Paid Deposit (plus
interest) shall be returned to Buyer (unless the Buyer's action, inaction or
qualifications shall have caused, or materially contributed to, the delay or
Buyer be in material default
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hereunder) or retained by Seller (unless Seller's action, inaction or
qualifications shall have caused, or materially contributed to, the delay or
Seller be in material default hereunder), and the parties shall be released and
discharged from any further obligation hereunder.
(b) Designation for Hearing. The provisions of Section 14(a)
notwithstanding, either party may terminate this Agreement upon notice to the
other, if, for any reason, the assignment application is designated for hearing
by the FCC, unless such designation for hearing arises from, is based upon, or
relates to the action, inaction or qualifications of the party seeking to
terminate, in which case such party shall have no right of termination;
provided, however, that notice of termination must be given within twenty (20)
days after release of the hearing designation order. Upon termination pursuant
to this Section 14(b), the Pre-Paid Deposit (plus interest) shall be retained by
Seller in the event the application is designated for hearing on grounds
relating to Buyer's qualifications, or returned to Buyer in the event the
application is designated for hearing on grounds relating to Seller's
qualifications, and the parties shall then be released and discharged from any
further obligation hereunder.
(c) Legal Actions. If, prior to the Closing Date, any action, suit, or
proceeding shall have been instituted by or before any court or other
governmental authority (other than the
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FCC) to enjoin, restrain, or prohibit the consummation of the transactions
contemplated hereby, the Closing may be adjourned at the option of either party
(with prior consent of the FCC if necessary, which consent both parties will use
their reasonable best efforts to obtain), for a period of up to ninety (90)
days, and if, at the end of such period, the action, suit, or proceeding shall
not have been favorably resolved, either party may, by written notice to the
other, terminate this Agreement, provided, however, that if such action, suit,
or proceeding shall have been solicited or encouraged by, or instituted as a
result of, any act or omission of, Seller or Buyer, then such party shall not
have any right of adjournment or termination pursuant to this Section.
(d) In addition, this Agreement may be terminated at any time on or
prior to the Closing Date: (i) by the mutual written consent of Seller and
Buyer; or (ii) by any non-defaulting party hereto if within seven (7) business
days after the date hereof, an application for FCC consent to the assignment of
the FCC Licenses to Buyer and the consummation of the transactions contemplated
by this Agreement that is acceptable for filing, subject to reasonable
supplementation and modification, has not been tendered for filing with the FCC
(provided that the non-defaulting party shall have used all reasonable efforts
to cooperate in the preparation of such application). A termination pursuant to
this Section 14 shall
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not relieve any party of any liability it may otherwise have for a breach of
this Agreement.
Section 15. Sales and Transfer Taxes and Fees. All Sales, Transfer and
Gains Taxes incident to this transaction shall be paid one-half each by Seller
and Buyer.
Section 16. Survival of Representations and Warranties. The several
representations and warranties of the parties contained herein shall survive the
Closing for a period of one (1) year; provided, however, that the
representations and warranties set forth in Section 5(f) (Taxes) and Section
9(a)(iv) (obligations to employees) shall survive until the expiration of the
applicable statute of limitations, as may be extended by waiver thereof, as the
case may be.
Section 17. Public Announcements.
(a) Prior to the Closing Date, no party shall, without the approval of
the other party hereto, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that such party shall be so obligated by law, in which case such party
shall give advance notice to the other party and the parties shall use their
best efforts to cause a mutually agreeable release or announcement to be issued.
Nothing in this Agreement shall be construed to limit Seller's normal duty to
publish all announcements required by the FCC and to make the filings with the
FCC contemplated by this Agreement.
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(b) Notwithstanding the foregoing, the parties acknowledge that the
rules and regulations of the FCC require that public notice of the transactions
contemplated by this Agreement be made after the application for the FCC's
consent has been filed with the FCC. The form and substance of such public
notice, to the extent not dictated by the Communications Act or the rules and
regulations of the FCC, shall be mutually agreed upon by Seller and Buyer.
Section 18. Miscellaneous.
(a) Schedules and Exhibits. All schedules and exhibits attached to this
Agreement (and all other documents referred to therein) shall be deemed part of
this Agreement and incorporated herein, where applicable, as if fully set forth
herein.
(b) No Assignment, Successors, Assigns, Etc. This Agreement shall not
be assigned or conveyed by any party hereto to any other person or entity
without the prior written consent of the other parties hereto, except that Buyer
may assign this Agreement and the rights and obligations hereunder to any of its
affiliates which will not release Buyer from any of the obligations and
undertakings provided for herein, and except that Seller may assign its rights
and duties to a commonly-controlled entity, which assignment will not release
Seller from any of its obligations and undertakings provided for herein.
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(c) Construction. This Agreement shall be construed and enforced in
accordance with the laws of the District of Columbia.
(d) Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
(e) Notices. Any notice or other communications shall be in writing and
shall be considered to have been duly given when personally delivered or
deposited into first class certified mail, postage prepaid, return receipt
requested:
(i) If to the Buyer to:
Spanish Broadcasting System
of Puerto Rico, Inc.
c/o ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., President
cc: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇, Scholer, Fierman, ▇▇▇▇
& Handler, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
(ii) If to Seller to:
Pan Caribbean Broadcasting Corporation
Condomino Emajagua #9A-B
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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cc: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
(g) Integration. Except as herein expressly provided, this Agreement
embodies the entire agreement and understanding among Seller and Buyer, and
supersedes all prior agreements and understandings, whether oral or in writing,
with respect to the purchase and sale of the Station's Assets.
(h) Amendment. This Agreement shall not be amended or modified in any
manner except by a written document executed by the party or parties against
whom enforcement of such amendment or modification may be sought.
(i) Confidentiality. Buyer and Seller agree that each will use its best
efforts to keep confidential all of the information of a business or
confidential nature obtained by it from the other (including, but not limited
to, the identity of Buyer, the proposed terms of this Agreement, and information
pertaining to Seller, whether related to the Station or otherwise; and, in the
event that the transactions contemplated herein are not consummated, in addition
to the other continuing obligations of the parties which shall survive the term
of this Agreement, the duties and obligations of the parties and their
respective agents and confidants shall continue for a term of twelve (12) months
from its termination regarding maintaining confidentiality as hereinabove set
forth; and, further, each of
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the parties will return to the other all documents, copies and other materials
obtained from the other in connection therewith. This Section shall not prevent
either party from disclosing such confidential information to their respective
attorneys, bankers, underwriters or investors as may be appropriate in
furtherance of this transaction (provided, however, such party shall similarly
be bound by this confidentiality provision) or to comply with any governmental
policy, regulation or law.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed through their duly authorized officers on the day and year first above
written.
SPANISH BROADCASTING SYSTEM OF
OF PUERTO RICO, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: President
PAN CARIBBEAN BROADCASTING CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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WDOY LIST OF SCHEDULES & EXHIBITS
Schedule 1(a)(i) Licenses & Authorizations Page 2
Schedule 1(a)(iii) Personal Property Page 3
Schedule 1(a)(v) Contracts, Leases &
Agreements Page 3
Schedule 1(e) Trade Agreements Page 5
Exhibit A Studio Lease
41
